What Happened?
Shares of theater company AMC Entertainment (NYSE:AMC) jumped 3.2% in the morning session after analyst upgrades and a strong summer box office performance fueled investor optimism.
The positive sentiment was driven by multiple Wall Street analysts upgrading the stock. Wedbush analyst Michael Pachter upgraded AMC from neutral to outperform and raised his price target, citing a more consistent upcoming film release schedule. Benchmark analyst Mike Hickey also increased his earnings forecast for the theater chain, noting the potential for "outsized potential upside." This optimism was supported by a recovering box office, with total domestic revenue up 15% year-over-year. Analysts now projected AMC's domestic ticket sales to jump significantly in the second quarter.
After the initial pop the shares cooled down to $3.53, up 1.2% from previous close.
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What Is The Market Telling Us
AMC Entertainment’s shares are very volatile and have had 27 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 7 days ago when the stock gained 8.1% on the news that the company received a bullish upgrade from analysts at Wedbush. Analyst Alicia Reese of Wedbush upgraded AMC's stock to "outperform" from "neutral," citing a more consistent movie release schedule expected over the next several quarters. The firm also raised its price target on the stock to $4.00 from $3.00. Wedbush noted that AMC is well-positioned to gain market share in 2025 and 2026.
AMC Entertainment is down 12.2% since the beginning of the year, and at $3.53 per share, it is trading 33.5% below its 52-week high of $5.31 from July 2024. Investors who bought $1,000 worth of AMC Entertainment’s shares 5 years ago would now be looking at an investment worth $96.41.
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